Sage profits increase 17pc

11 May 2004

Accounts software vendor Sage has reported that pre-tax profits for its half year increased 17pc to £86.7m sterling. London Stock Exchange-listed Sage attributed the growth to recent acquisitions and increased sales to SMEs.

Turnover at Sage for the half year increased 23pc to £332.5m sterling, while operational cash flow grew 22pc to £122.8m sterling.

During the half year ended 31 March, Sage reported that it signed up 146,000 new customers as well as an additional 903,000 customers from four acquired businesses, bringing the company’s customer base to 4.3 million, excluding CRM customers.

Software revenue grew 15pc to £124.7m sterling, representing 38pc of Sage’s group revenues, whilst service revenue jumped 29pc to £207.8m, representing the remaining 62pc of group revenues. Support contract revenues were a key driver and alone accounted for 50pc of group revenues at Sage.

On Monday, Sage revealed that it had acquired a rival in the Irish market for a sum understood to be in the region of €1m. The acquisition of Service Software Accounting Package (SSAP) will give Sage additional capabilities in the realm of taxation and submitting returns electronically as well as instantly receiving clients’ assessments online. Sage entered the Irish market in 1999 when it acquired Access Accounting. It employs 170 people in Ireland at its CityWest, Dublin, operations centre.

Sage chairman Michael Jackson commented: “These results show improved underlying revenue growth compared to recent reporting periods. They demonstrate the value of our key asset, our large and growing customer base of over four million SMEs, to which we are successfully selling our extensive range of products and services. They also show the early contribution from our four recent acquisitions where integration into the group is proceeding swiftly and effectively.” Jackson said the company views the rest of 2004 with confidence.

By John Kennedy